You need a Certified Public Accountant (CPA) to handle your financial management, so that you can focus on the vision of your company. A CPA has specific accounting expertise and can perform many vital functions for any business, from tax filing to conducting an internal audit or preparing reports. Without a CPA as part of your team, all these tasks would fall on your shoulders as the owner, or on a member of your staff who is not as qualified. Let's explore what a CPA actually is, the services they can provide, and why your business or organization should rely on one.
What is a CPA?
A CPA is a professional licensing designation that an accountant can claim after meeting a set of specific requirements. The first step is to earn a bachelor's degree in accounting, business administration or finance. Next, they have to work for a public accounting firm for two or more years.
Finally, to earn the CPA designation, they must sit for and pass the Uniform CPA Exam. This is a grueling, 16-hour test that is very difficult to pass. The exam is extremely challenging, and purposefully so. According to the American Institute of CPAs (AICPA), which develops and administers the test, the pass rate was less than 50 percent in 2021. Once an applicant passes the test, they can obtain their CPA license from their individual state's Board of Accountancy.
The work doesn't finish once the CPA license is earned. The CPA must then take several hours of continuing education each year, to stay up-to-date on tax and regulatory changes. CPAs must also adhere to a strict ethical code, known as the Code of Professional Conduct. Failing to adhere to the code could result in the CPA license being stripped away.
Services a CPA Can Provide
A CPA can provide a wide range of services, whether you run a large or small business. They are even qualified to move into executive jobs within a company, such as being a financial controller or a chief financial officer (CFO).
They are primarily known for income tax preparation and filing, but CPAs are also qualified to conduct and sign off on audits, perform forensic or managerial accounting, and bookkeeping. They can compile, maintain and review financial statements. A CPA can also provide consulting and advice for your business, as you plan to expand and grow.
To recap, a CPA can perform all of the following functions to suit your business needs:
- Bookkeeping
- Accounting services
- Tax preparation, tax compliance & tax filing
- Financial planning
- Auditing
- Financial advice & business consulting
- Financial statements & reports
Why Your Business Should Rely on a CPA
There are many benefits to having a CPA for your business. IRS regulations and tax compliance are some of the biggest headache-inducing problems that business owners face. The tax rules are complex and change yearly. A CPA can ensure that your taxes are filed properly and on time, every time. The professional guidance of your CPA can also help to minimize or limit the possibility of an IRS tax audit.
A CPA can perform vital financial management tasks for you. They can prepare financial statements that adhere to the GAAP (Generally Accepted Accounting Principles). Once a CPA has been assisting you for a while, they will have valuable insights that they can share with you in terms of business consulting and advice. They will know your complete ledger balance inside and out, including credits, debits, profits, and losses.
CPAs are also very technologically savvy when it comes to corporate finance. They have the knowledge and skills to use cutting-edge financial software to quickly prepare statements and reports. They can provide a complete snapshot of your business in a quick and easy fashion, which allows you to make better business decisions.
A CPA can be invaluable as a business advisor when you are ready to grow and expand your company. They can help you appraise future projects in terms of viability and projected profits and losses. The survival of your business is too important to miss out on the expertise, experience and advice from a qualified CPA.
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